Sponsors
The bill offers a targeted tax deduction to steer buyers toward U.S.-assembled cars and support domestic auto jobs, while shrinking federal revenue, creating unequal treatment for purchasers of imported-assembled vehicles, and imposing additional administrative burdens.
Buyers of qualifying U.S.-final-assembly vehicles (taxpayers, middle-class families, small-business owners) can deduct interest on acquisition loans for vehicles purchased on/ or after Jan 1, 2025, encouraging purchases of domestically assembled cars and supporting U.S. auto jobs.
Taxpayers generally: The deduction reduces federal revenue, which could increase deficits or create pressure to cut spending or raise other taxes.
Taxpayers who buy imported-assembled cars (including many middle-class buyers): They will not receive the deduction, producing uneven tax treatment based on a vehicle's place of final assembly.
Financial institutions and government: IRS, dealers, and lenders may face higher administration and compliance costs to verify 'final assembly' status and loan eligibility, adding complexity to implementation.
Based on analysis of 2 sections of legislative text.
Allows a federal income tax deduction for interest on loans to buy automobiles whose final assembly occurs in the United States for debt incurred on or after Jan 1, 2025.
Introduced April 1, 2025 by Bernardo Moreno · Last progress April 1, 2025
Allows a federal income tax deduction for interest on loans used to buy automobiles whose final assembly occurs in the United States. The deduction applies to interest on debt taken out on or after January 1, 2025, for vehicles defined by reference to federal motor-vehicle law and requires the loan to be secured by the vehicle.